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Australia: Howard loses to Rudd – 2

Australia’s new prime minister, Kevin Rudd, outlined his vision for his country in an article he wrote last year for a local political magazine, the Monthly. Riffing off Dietrich Bonhoeffer, a 20th century German pastor and theologian, the bookish former bureaucrat decried what he called “rampant individualism.” John Howard’s conservative government, Mr. Rudd argued, had gone too far by liberalizing labor markets and sacrificing “family time” at “the altar of market utility.” Australia needs a new kind of socialism, he said, one that keeps the economy running but simultaneously emphasizes “equity, community and sustainability” and gives “power to the powerless.”

Mr. Rudd’s pitch came at just the right time. Mr. Howard was entering his 11th year as prime minister. The economy was humming along like it hadn’t in a generation, boasting full employment, manageable inflation and 16 years of economic expansion. Why not try something new, Mr. Rudd’s “Kevin ’07” campaign asked. “It’s time for a change,” the slogan went.

On Saturday, voters agreed. Mr. Rudd and his Labor Party surged to victory in one of the largest swings against an incumbent government since World War II, winning at least 83 seats in the 150-seat lower house of Parliament. Now the big question is what Mr. Rudd will do with his mandate. The answer lies, in large part, with how much power the prime minister can wield within his own party.

Mr. Rudd is a relative political lightweight compared to his deputy, Julia Gillard, who earned her stripes in the rough and tumble trade union movement. Mr. Rudd, who is 50, is not a career politician. He was elected to Parliament in 1998, joined the front bench in 2001 and was named party leader last November. The Labor Party is underpinned by trade union money and influence, and Mr. Rudd’s brand of socialism is too far right for many. It’s a risky balancing act. If Ms. Gillard’s hard-line socialism prevails, Australia could see trade unions gain power as the global economy is slowing — in other words, just as Australia, the world’s 15th-largest economy, should be liberalizing, not restricting, its domestic markets.

Fortunately, Mr. Rudd is also hemmed in by his campaign promises, particularly on economic policy. In a bid to “reclaim the middle ground” and make Labor electable, Mr. Rudd effectively copied the Howard government’s program of fiscal responsibility, lower taxes and support for free trade. When Mr. Howard announced a 34 billion Australian dollars (US $30 billion) tax-cut plan, Mr. Rudd rolled out a strikingly similar A$31 billion program. Dubbing himself an “economic conservative,” he persuaded voters he’d be a safe pair of hands. If he strays too far toward redistributionist policies, he risks losing public support rapidly.

If trade unions do take control of Australian policy I don’t think a Labor government will last long. <more>